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Capital Gains Tax (CGT) Audits

Capital Gains Tax (CGT) is a tax paid on any capital gain that is made in a given financial year. This can include the sale of property, shares or managed fund investments. It is not a separate tax, but rather forms part of your income tax liability.

The tax office often conducts CGT Audits to ensure that taxpayers are compliant with their legal obligations.

We have included some brief information below about CGT and CGT Audits.

For more detailed or specific information regarding CGT Audits complete and submit the Express Enquiry form on the top right hand side of this page and we will contact you to discuss your enquiry or call us on 1300 QUINNS (1300 784 667) to arrange an appointment.

Individuals

Taxpayers that are identified as high risk because they have not disclosed a capital gain, significantly under-reported a gain or failed to lodge a return will be audited.

The ATO will compare tax returns with information from state revenue offices and other government agencies, the Australian stock exchange and share registries as well as information reported by managed funds.

The ATO will examine approximately 6000 at-risk cases this year.

Micro-businesses

ATO compares information from external sources with information provided in returns to ensure that capital gains and losses are being reported and claimed appropriately, particularly for transactions that involve:

  • Property;
  • Shares;
  • The chartered boat industry; and
  • The fishing industry.

The ATO monitor asset disposals and transfers particularly to superannuation funds. The aim is to identify cases that involve aggressive tax planning, inappropriate valuations or complex structures designed to avoid or minimise capital gains tax.

Small-medium Size Enterprises

The ATO will conduct reviews and, where necessary, audits to identify small to medium size enterprises that are deliberately manipulating their business affairs to minimise a capital gain or obtain a capital gain tax concession.

This year the ATO reviews are focusing on businesses that are:

  • Setting up arrangements to reduce their capital gain when the business is sold;
  • Claiming small business concessions when they do not satisfy the threshold requirement;
  • Failing to report capital gains tax events;
  • Using significant capital loss to offset capital gains; and/or
  • Resetting the cost base of assets under consolidation, particularly where there have been significant capital gains or losses.

Large Businesses

The ATO is working to ensure that economic gains are reflected in taxable gains as appropriate.

The ATO examines capital gains tax issues arising from mergers, acquisitions, divestments and capital rearrangements. When non-resident businesses dispose of their Australian assets and make a capital gain, the ATO takes action, where possible, to collect the appropriate amount of tax on that gain before sale proceeds are sent offshore.

Our dedicated team can assist you with all your auditing needs. Complete and submit the Express Enquiry form on the top right hand side of this page and we will contact you to discuss your enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.

You may also wish to visit our dedicated GST website for more information www.allcapitalgainstaxsolutions.com.au.

© The Quinn Group Australia Pty Ltd ABN 86 078 526 860

The Quinn Group operates Quinn Consultants, Quinn Lawyers, Quinn Financial Planning and Quinn Financial Solutions. The Quinn Group provides related information in regard to legal, accounting and financial planning issues. Liability limited by a scheme approved under Professional Standards Legislation* *other than for the acts or omissions of financial services licensees.